Despite today's 0.5 per cent cut in interest rates, additional measures must be introduced to improve the supply of mortgage finance, it has been suggested.

According to the Royal Institution of Chartered Surveyors (Rics), the rate cut might have an effect by improving consumer confidence.

But Simon Rubinsohn, chief economist at Rics, said: "There is still a real need to stabilise the economy and increase the supply of mortgage finance to ensure an orderly housing market."

Today's decision by the Bank of England took interest rates down from 1.5 per cent to one per cent - a new historic low.

Private landlords have had limited joy from rate cuts of late being passed on in the form of cheaper buy-to-let mortgage deals, as lenders have tightened their borrowing criteria - requiring larger deposits for loans.

Adrian Coles, director general of the Building Societies Association, went further than Mr Rubinsohn, claiming that the rate is bad news for the mortgage market.

He said people will now be less likely to save, which will further disrupt available capital for mortgage finance.ADNFCR-2002-ID-19010854-ADNFCR

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